Correlation Between Clearwater Analytics and QuhuoLtd

Can any of the company-specific risk be diversified away by investing in both Clearwater Analytics and QuhuoLtd at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Clearwater Analytics and QuhuoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clearwater Analytics Holdings and QuhuoLtd, you can compare the effects of market volatilities on Clearwater Analytics and QuhuoLtd and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Clearwater Analytics with a short position of QuhuoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Analytics and QuhuoLtd.

Diversification Opportunities for Clearwater Analytics and QuhuoLtd

0.65

Correlation Coefficient

Clearwater Analytics  QuhuoLtd

Poor diversification

The 3 months correlation between Clearwater and QuhuoLtd is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and QuhuoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuhuoLtd and Clearwater Analytics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Clearwater Analytics Holdings are associated (or correlated) with QuhuoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuhuoLtd has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and QuhuoLtd go up and down completely randomly.

Pair Corralation between Clearwater Analytics and QuhuoLtd

Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to under-perform the QuhuoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Clearwater Analytics Holdings is 4.06 times less risky than QuhuoLtd. The stock trades about -0.34 of its potential returns per unit of risk. The QuhuoLtd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  54.00  in QuhuoLtd on February 2, 2024 and sell it today you would earn a total of  3.00  from holding QuhuoLtd or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Clearwater Analytics Holdings  vs.  QuhuoLtd

Clearwater Analytics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearwater Analytics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

QuhuoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QuhuoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Clearwater Analytics and QuhuoLtd

The main advantage of trading using opposite Clearwater Analytics and QuhuoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Analytics position performs unexpectedly, QuhuoLtd can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in QuhuoLtd will offset losses from the drop in QuhuoLtd's long position.

The idea behind Clearwater Analytics Holdings and QuhuoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.